BU127 Lecture Notes - Lecture 6: Asset, Deferral, Retained Earnings
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BU127 Full Course Notes
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Look in the textbook and do the readings, activities, etc. Buildings and equipment -> depreciation expense: if cash is paid after the company receives goods or services, a liability accounts payable in recorded. Retained earnings the expanded transaction analysis model. Retained earnings: debit for decrease, credit for increase: net losses and dividends decrease retained earnings o net earnings increase retained earnings. Revenues and gains: debit for decrease, credit for increase. Expenses and losses: debit for increase, credit for decrease. Beginning equity + net earnings dividends declared +/- other = equity. Assets = liabilities + shareholders" equity: se: contributed capital, retained earnings, other. Change in cash = changes from operating, investing, and financing activities total asset. Total asset turnover ratio = operating revenues / average total assets o avg. Total assets: (beginning + ending total assets) / 2. This ratio measured the sales generated per dollar of assets. Creditors and analysts use this ratio to assess a company"s effectiveness at controlling.